July 8, 2020 Market Update

July 8, 2020

The stock markets in 2020 have resembled riding a wild roller coaster for investors. Despite a very weak economic outlook earlier in the year due to uncertainty surrounding the coronavirus, major global stock markets have recovered most of their losses for the year. Investor sentiment seems to have improved due to several reasons:

  • Government support: Interest rates have been cut to nearly zero in many developed economies. As well, governments have created many programs that have deployed billions of dollars of support for individuals, corporations and municipalities.  
  • End of lockdown: Many countries, initially led by China and Germany and later joined by the United States, have begun to slowly reopen their economies. 
  • Health care: There have been positive developments on the health care front. Reports indicate there’s a possibility the average length of time to develop a vaccine has been shortened along with encouraging news surrounding drug therapies.

The market recovery has been broad-based and not limited to any one country. In Canada, the S&P/TSX Composite Price Index has rallied 16.0% in the past 3 months for a year-to-date return of -9.1%. In the United States, the S&P 500, Dow Jones, and Nasdaq Price Indices have rallied 20.0%, 17.8% and 30.6% for a year-to-date return of -4.0%, -9.6%, and 12.1% in U.S. dollar terms. In overseas markets, international equities were up 14.2% in the last 3 months, in U.S. dollars as measured by the MSCI EAFE Price Index, for a year-to-date return of -12.6%. 

  1. March, the Canadian mutual fund industry had its worst month ever, in dollar terms, as it saw more than $14.1 billion in net selling. Investors who followed a disciplined approach and stuck with their investment plan have seen their portfolios regain most of the losses. In times of uncertainty, it’s crucial to remain focused on your long-term goals and avoid costly mistakes that are often dictated by emotion.

The potential good news is that the worst is likely behind us. Social distancing measures, travel restrictions and a better resourced health care network mean we’re better prepared for potential future outbreaks of COVID-19. But the economic recovery will be gradual as we reemerge slowly and adapt to the new normal.

Historically, the bottoming period during a recession lasts for several quarters, rather than several months, and we believe this time is no different. Recovery may look like a two step forward, one step back process as economies slowly reopen, which will likely lead to market ups and downs over the coming months.

And so, the message remains the same: Remove emotion from decision making, focus on your long-term goals, and take the opportunity to rebalance your portfolio. Avoid selling investments when markets are low–instead, commit to investing smaller amounts on a regular basis over the next 6-12 months, to take advantage of potential market upswings while mitigating any downside risks.

As always, if you have questions about the markets or your investments, we’re here to talk.

April 23, 2020

Protecting yourself and loved ones from fraud during these extraordinary times.

Times of crisis can bring out the best in people, unfortunately, it can also bring out the worst.

According to the Canadian Anti-Fraud Centre, there have been a number of COVID-19 related scams aimed at the most vulnerable by taking advantage of fear and misinformation. It’s important to keep yourself and your loved ones, especially those who may be more susceptible to fraud, armed with the facts.

Here are some scams that are being used to take advantage of people during the COVID-19 crisis:

  • Emails, phone calls and text messages encouraging seniors to apply for COVID-related government benefits.
  • A version of the CRA scam where fraudsters threaten that your provincial medical benefits have run out, or are running out, and you need to send money to reinstate them or to buy private medical insurance.
  • A phone call from someone posing as a representative from a provincial or municipal health authority saying you have been found to either have COVID-19 or have been exposed to it. The caller then asks for your credit card to pay for testing or results.
  • A phone call from someone posing as a Canada Post or UPS representative saying you have a package (often international) that they’ve attempted to deliver but you need to pay duty or shipping first.
  • Fake financial planners calling about opportunities to boost your investment portfolio after losses due to COVID-19.
  • Fake bank messages asking for a social insurance number and banking information to set up direct deposit for government funds due to COVID-19.
  • Websites asking for credit card donations to help purchase personal protective equipment for front line health care workers.
  • A phone call from a fake community organization claiming they’re trying to help socially isolated seniors. In some cases, these callers are trying to identify vulnerable seniors to gain access to their home to sell them things or steal their personal information.
  • Romance scams through social media and online dating sites targeting seniors who may feel lonely due to isolation during the crisis.

There are also legitimate organizations reaching out to vulnerable seniors during the crisis. It’s important to verify that the organization you're dealing with is legitimate before you take any other action. And never give out your financial information.

If you think you or a loved one may have fallen prey to a scam or want to learn more about how to protect against fraud, I encourage you to visit trusted sources of information, including the Canadian Anti-Fraud Centre.

As always, if you have questions about the markets or your investments, we’re here to talk.

Canadian Equities

Philip Petursson, Chief Investment Strategist provides his views on Canadian Equities

 

U.S. Equities

Philip Petursson, Chief Investment Strategist provides his views on U.S. equities.

 

International Equities

Philip Petursson, Chief Investment Strategist provides his views on International Equities

Dollar Update

Philip Petursson, Chief Investment Strategist provides his views on the Dollar Update

 

Fixed Income Update

Philip Petursson, Chief Investment Strategist provides his views on Fixed Income